The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Christie administration’s expansion of the civil service by a net 4,500 persons since taking office was yesterday branded “very distressing” by a leading governance campaigner, who said it had failed to produce improved public services.

Robert Myers, a principal with the Organisation for Responsible Governance (ORG), said he was “mystified” why the administration was expanding the size of government when the Bahamas needed just the opposite.

Arguing that the Government should instead be

“shrinking” the public sector, he questioned whether Bahamian taxpayers were receiving value for money from an enlarged civil service, given that service delivery and efficiency had shown no signs of improvement.

The extent of the civil service expansion under the Christie administration was revealed earlier this week by the minister responsible for the public service, Shane Gibson, in a House of Assembly address on moves to ‘regularise’ employees on temporary contracts.

Mr Gibson said 1,513 persons had retired from the public service during the period May 2012 to December 2016, which represents the Christie administration’s term in office, with 6,015 persons appointed over that time.

Taking these statistics at face value, they mean that the public service has expanded by a net 4,500 persons during the Christie administration’s term in office, and at a time when the Bahamas’ fiscal position has become extremely strained and beset by credit rating downgrades.

Taking $12,000 as a crude ‘average salary’ for Bahamian civil servants, Tribune Business calculations show that the 4,500 ‘new hires’ have added a collective $54 million to the Government’s annual civil service wage bill. If $15,000 is taken as the average salary, the total increase becomes $67.5 million.

The data indicates where at least a portion of the $1 billion Value-Added Tax (VAT) revenue ‘windfall’ has gone - on expanding the size of the Government and public service, as opposed to narrowing the deficit and paying down the $6.778 billion national debt.

With the 2017 general election fast approaching, the pace of public service hires is likely to further quicken, as MPs lobby to find their constituents jobs in the hope of securing their votes.

And the 4,500-strong public service expansion will also further strain the Government’s unfunded civil service pension liabilities, which are currently covered by taxpayers in every year’s Budget.

The KPMG accounting firm previously disclosed that unfunded public sector pension liabilities, which it currently estimates at around $1.5 billion, are set to increase to $2.5 billion by 2022, and $4.1 billion by 2032, unless essential reforms are enacted.

Mr Myers yesterday told Tribune Business that while the likes of ORG understood the need to ‘regularise’ civil service employees who have been on temporary contracts for up to two decades, the Bahamas was growing the wrong part of its economy and workforce.

“In the same vein, we’re mystified as to why there would be an increase in government employment, and expansion of the Government, when what is in fact needed is a shrinking,” he told this newspaper.

“That’s very distressing, especially as there’s been no emphasis on creating any level of accountability within the civil service and the public sector. That has to change. We’ve got to become more efficient and accountable in government.”

Other fiscal hawks were equally alarmed. Rick Lowe, an executive with the Nassau Institute think-tank, said the civil service was becoming so large that the private sector was struggling to finance it through taxes paid to the Government.

“They keep on increasing the size of the civil service, while making it harder and harder for private sector to grow,” Mr Lowe told Tribune Business.

“Sooner or later, it’s going to topple over. It’s completely unsustainable. It gets to the point where the civil service is so large that the public sector cannot pay for it, and sooner or later it’s going to collapse in on itself.”

Mr Myers said that ‘smaller government’ in the Bahamas “doesn’t necessarily mean people losing their jobs”.

Instead of adding to the public service as a way to keep unemployment under control, the former Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman said the Government instead had to facilitate an environment in which the private sector could thrive.

This, he explained, would enable there to be a “reallocation” of jobs from the public to the private sector, with workers switching into the latter rather than simply being made redundant.

“An expansion of the civil service at this point tells me that someone has completely lost the plot,” Mr Myers told Tribune Business. “What we should be doing is the complete opposite.

“We should be shifting workers. It’s not a retraction; it’s a realignment, and in doing so you’re creating accountability and efficiency. We’ve got to start getting these people to understand that. It cannot be business as usual again. We’re headed down a very dark path unless we reevaluate our thinking on how the Government does business.”

Mr Myers argued that the Government should seek to outsource and privatise services that could be performed more efficiently by the private sector, with the main objective being to create entrepreneurial opportunities and employment for Bahamians.

He argued that improved governance, and greater accountability and transparency, required not just ‘buy in’ from the political class, but the upper echelons of the civil service, including ministry, department and agency heads.

Revealing that he was treating the country and its government as a business called ‘Bahamas business’, Mr Myers explained: “If you look at the Bahamas as a business, and are tasked with fixing it, any good, self-respecting businessman and woman will go in there and compare income to expenditure, then start to understand where you can get greater efficiency and performance, and how you can cut costs. That’s what needs to happen.”

While the Christie administration had expanded the size of government, Mr Myers said it had likely produced little to no benefits for most Bahamians in terms of more efficient and effective public services.

“We’ve expanded government, but are getting no greater services or efficiency from it,” he told Tribune Business. “What are we paying for? There are more people, but are we getting more or better services? I would argue no.

“What are we hiring these people for, on top of the fact we’re spending way more than our income. It’s a poor reflection, and inversely correlated to where we should be. In an environment where we should be shrinking government, why are we expanding it?”